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No Confidence in Government Motion Defeated by 58-31 Vote

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The Knesset voted 58-31 with two abstentions last night to defeat an opposition motion of no confidence in the government over the financial failure of two State-owned corporations, the Vered water resources development company and Arad Chemicals. Vered was the subject of a highly critical report issued by the State Comptroller last week. Arad, in addition to its financial difficulties, was reported today to have halted operations as a result of a technical breakdown that could take nine months to repair.

The no confidence motion was introduced by Gahal, the State List and the Free Center factions whose spokesmen accused the government of “criminal negligence” in a series of development projects involving Vered. Yigal Horowitz of the State List alleged that the government squandered public funds amounting to IL 250 million in various projects, enough he said to have solved the housing shortage.

Haim Gvati, Minister of Agriculture and Minister of Development, replying for the government said its success in many other projects vindicated the admitted failures of Vered and Arad. He denied that the Foreign Ministry had pressured Vered to undertake extravagant projects abroad for political reasons, a denial supported by the State Comptroller’s report.

The report placed the blame for Vered’s failure entirely on that company’s management. It said losses amounting to some $20 million were the result of Vered undertaking construction and other projects in foreign countries in fields in which it lacked experience and without bothering to calculate the likely profits and costs.

At the time of Vered’s failure it was engaged in road building and other construction work in Nigeria, Iran, Kenya, Uganda, Ivory Coast, Peru, Honduras and Brazil. The Comptroller’s report said that Vered acted out of misguided motives when it consistently underbid competitors of other countries in order to secure contracts for Israel.

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